Tag Archives: recession

In India, it seems like real estate companies are following a different trend for compensating their top management. During 2009, many company CEOs took massive pay hikes, but now they have chosen to either forego their hikes, or at least take modest ones this year, when the sector is doing much better.

Last year, CEOs of few companies like HDIL’s Sarang Wadhawan and Unitech’s Sanjay Chandra came under scathing criticisms from the media. It is hard to believe that in the recession time period of 2008-2009, Chandra got a raise of about 60% whereas Wadhawan got an increment of a whopping 200%.

However, this year the story is quite different. Wadhwan and Chandra both are somewhere at the same salary levels as previous year, thus Unitech’s MD annually earns Rs 1.71 cr. and Rs 6 crore for HDIL’s Wadhawan.

Other than these CEOs, JC Sharma of Sobha Developers took a 25% increase this year, quite modest one. Also, the MD of Puravankara Projects and Godrej Properties, Mr. Ashish Puravankara, scaled up by about 43% annually.

As the phase of recession is towards its end, an increase in demand of commercial real estate projects, including both office and retail space has been witnessed by firms and retailers.

The executive director for development services at consultants Cushman and Wakefield India, Ravi Ahuja said that in many cities including Mumbai and Delhi-National Capital Region (NCR), the commercial space leased out or sold by the firms is about 9.2 million sq. ft within just a time span of three months, while the space leased and sold during April-June 2009 was just 5.8 million sq. ft.

Last year, the retail space available was 6.3 million sq. ft. However, this year, some 16.4 million sq. ft of retail space is expected to be available. Consultant Jones Lang LaSalle Inc. has predicted 8.9 million sq. ft will be absorbed this year, compared with 4 million sq. ft in 2009.

Photo by Saga A’xeronAfter the success of ‘Affordable homes’, realtors are now moving towards the launch of luxurious housing. The demand for luxurious houses indicates that there is big scope for realtors there.

With this increase in demand, many developers including Ansal API, Unitech, DLF, Emaar MGF etc are jumping into this business and plan to launch huge number of housing projects within next six months, where the cost of each single unit will be over Rs. 2 cr.

According to the executive vice-chairman and managing director at Emaar MGF, Shravan Gupta, since the recession period is over and job market is looking up, there are chances of realty boom too.

Within six months, cities like Punjab, Gurgaon, Bangalore, Hyderabad and Kerala will be overloaded with such projects.

Affordable housing is an unquestionable concept. The buyers and their service providers learnt a lot from the sudden growth of Indian economy and the recession which followed it.

It was a miserable condition for buyers when the annual GDP growth rate hit double digits. Be it be a vehicle or a house, an essential or a non essential product, everything was quoted at a big price. But, thanks to the banks which offered every kind of loans to the investors and brought them out of their miseries. However, the recession is over now.

After this recession, the affordable housing emerged as a new as well as interesting concept which became the ray of hope for all. Due to these affordable houses only, the realty market could recover so early. Thus, it would be nowhere wrong to call ‘Affordable Housing’ a pillar of residential realty market in this scenario.

Everybody is cursing recession as it resulted into slowdown in market. But, have you ever realized that there is always some positive aspect behind every off-putting phase. Recession has changed the point of views of consumers, lenders and developers as well. Consumers became more cautious during spending their saved money. On the other hand developers shifted their focus towards low cost housing.
Recession has made tremendous changes in real estate, various real estate giants showed interest in housing for middle class people rather than building a huge complex. Investors may seem to be winners with recession giving them an opportunity to pick investments at more realistic prices.

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